In short: Canonical funds it.
Where they get the money from is perhaps a better question. Well they sell services and support and they also have a fairly wealthy founder in the shape of Mark Shuttleworth.
Edit: As others have said, the latest report we have on finances is from 2008 when the company wasn't near breaking even but as I've just detailed in a comment, for things you believe in, breaking even isn't everything... Especially when you can afford for it to make a loss.
Of course the aim is for the project to become self-sufficient but at the moment the only return on investment comes through the channels I've already talked about. OEM services, B2B support, consumer level paid support. You have to respect that once Ubuntu hits critical mass gets real demand, the demand for professional services and complimentary products also increases.
If you want detailed financial information, I suggest you call Canonical. They'll either give you the numbers or tell you to stop being so nosey... But they're the only people that can tell you for certain.
Edit 2 (Re: "can't have it both ways"): - Utter nonsense! Of course you be benevolent and keep a vested interest in something. His belief and benevolence toward Ubuntu is there to help it fix Bug #1 which helps his commercial interests in Canonical.
There's no contract in kindness that stops you making money from it immediately or down the line.